Sample Tests

1. The word economics derives from an early Greek term that means management of a:

a) business. b) government. c) household. d) financial institution e) industry.

2. The theory that there is an orderly set of proper rules for governing society, and that the appropriate task of the scholar is to discover those rules through reason is known as:

a) self interest. b) mercantilism. c) natural law d) economic sociology

e) contrarian conjecture.

3. The school of thought most favorably disposed to imperialism and nationalistic policies is: a) mercantilism b) Keynesianism c) American institutionalism d) neoclassical theory

e) Austrian economics.

4. Mercantilist thought implicitly assumed that:

a) total wealth in the world is fixed b) economic wisdom derives from a proper reading of scripture c) free trade is the best way to maximize the wealth of a nation.

d) excessive amounts of gold quickly trigger inflationary pressure.

e) there is no right answer

5. Mercantilist doctrine identified national wealth and power as depending on a nation’s ability to:

a) save and invest in new capital b) acquire colonies to serve as customers.

c) boost imports and decrease exports d) acquire gold and silver e) free trade

6. In addition to the mercantilists’ concerns for money accumulation, they also elaborated the concept of:

a) demand curves b) business cycles c) divisions of labor d) balanced and unbalanced international trade e) negative externalities.

7. The central goal of mercantilism was:

a) prevention of surpluses of exports over imports b) maximizing wealth accumulation in a nation c) to exploit the working class, thereby facilitating capital accumulation.

d) an open, international economy e) replacement of feudal monarchies by commercial interests.

8. Orthodox mercantilists would almost universally opposed:

a) the idea that monarchs rule by divine right b) running balance of trade deficits.

c) the top-down approach to management and administration d) state authorized monopolies e) imperialistic policies.

9. Mercantilism holds that maximizing the wealth of a nation requires the nation to:

a) pay all workers just prices b) encourage large firms to form strategic alliances so that they can outperform foreign producers c) decentralize its government d) deregulate foreign trade policy